Market Update: E-commerce in the Time of Coronavirus

The world is now in Month #2 of COVID-19, which just last week the World Health Organization declared to be a full-scale pandemic. Both public and private sectors have sprung into action (albeit at varying speeds) to combat the crisis, and news stories day and night are talking about citizen quarantines, as well as the halting of business and nonessential services in various countries, states, and municipalities. The global supply chain is already experiencing a once-in-a-lifetime disruption – one estimate even says 75% of companies are affected – not to mention the ripple effects that will be felt in the coming months and years. Here’s a quick update on some of the most popular e-commerce channels:

Good news first: online sales are projected to go way up, one of China’s e-commerce giants, has seen online sales quadruple year-over-year – and why wouldn’t they? Everyone is self-quarantining, avoiding crowded places like malls and restaurants, and generally practicing good social distancing. People are bound to get a bit bored just sitting at home either working or binge-watching Netflix – so expect an influx of retail therapy. Just remember: soap is more effective than hand sanitizer, so don’t spend $700 on that bottle of Purell!

Amazon is limiting the sale of nonessential products

If you’re a third-party vendor selling products through Fulfilled by Amazon (FBA), Amazon’s warehouse e-commerce channel, you may be in for a bumpy ride this month. As of Tuesday, March 18, Amazon plans to use its massive distribution network to prioritize basic needs goods, including “household staples, medical supplies, and other high-demand products,” according to BusinessInsider. If you’re an Amazon wholesaler selling anything outside the categories of “baby product[s]; health and household (including personal-care appliances); beauty and personal care; grocery; industrial and scientific; [or] pet supplies,” expect to experience a pause in your ability to ship new products to Amazon’s warehouses through April 5 (although we’d expect that to be extended should the global situation worsen). Last-mile services are not affected as of this posting.

Remember: if you’re selling on Amazon, make sure to monitor inventory closely. You could get punished for letting a product be out of stock for more than 30 days.

Walmart is cutting operating hours

In a letter posted last week, Walmart says it is adjusting retail hours worldwide to allow for adequate stocking. The global retailing giant had a Kentucky employee test positive for COVID-19, but that doesn’t mean they’re not trying their hardest to keep in-demand goods like toilet paper on the shelves, despite recent stockouts. (Remember: diarrhea isn’t a common symptom of coronavirus – at least not in humans.)

Fortunately, if you’re selling on Walmart Marketplace, you should be fine; apart from the industrywide strain, there have been no announcements regarding specific service disruptions to the online store.

eBay is coming down hard on price-gouging and hysteria

Global e-commerce leader eBay released a statement addressing the recent hysteria and unscientific claims being made about certain products in their marketplace. In response to price-gouging and false advertising, they have blocked the sale of certain items outright, including “health care masks including N95/N100 and surgical masks, hand sanitizer/gel, [and] disinfecting wipes.” Just a reminder to all readers that price-gouging is not only unethical, but explicitly illegal in many places currently under states of emergency.

Shopify is full-speed ahead (for now)

The bottom line: don’t freak out

Everyone is navigating uncharted waters right now – but we’re doing it as a community and as a collective. While e-commerce may be affected for the next few weeks, and maybe even a month or two, if we all do our part as citizens and businesses we should be back up and running stronger than ever, and soon. Always check with reputable sources like the CDC for the latest information, have your warehouse staff wearing gloves at all times, and make sure your facilities are stocked with soap! (And, again, please don’t spend $700 on Purell.)